Mifid II looks set to relent on execution-only ban
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A leaked draft of Mifid II suggests that execution-only sales will be allowed to continue under the directive.
In December, the European Commission published a Mifid consultation paper which said it was considering banning execution-only sales.
The European Parliament’s leaked draft of Mifid II, seen by Money Marketing, says investment firms will be allowed to offer execution-only services and will not be required to obtain client information or determine suitability.
The December consultation paper also suggested advisers should have an ongoing responsibility to ensure investment products remain suitable for clients.
However, the draft suggests that advisers can agree with clients what level of ongoing service they will provide.
The draft suggests that national regulators will retain the article three exemption, which allows firms that do not hold client money and do not passport into other jurisdictions to opt out of Mifid, but it is unclear if these firms will also avoid the capital adequacy directive.
The European Parliament is due to publish the directive next month.
Evolve Financial Planning director Jason Witcombe says: “This sounds sensible. Not all clients want advice or an ongoing service.”
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